Question

Through the generosity of an unknown benefactor, you have been given $50,000 with the following laughable requirement: start a business in 90 days. You know there are several types of options available to you, most of which are quite frightening…yet strangely invigorating! Although you’ve never really given it much thought, the idea of beginning such an endeavor does have a familiar tone to it. The business must be operational by June 1st.
Your challenge now: what kind of business and what are the first steps? Where do you go from here?

Answer the following questions:



What forms of business are available to you?


What are the pros and cons of each option?


Which would you choose and why (be very descriptive!!)


What challenges do you think you will you face (additional $$, training, etc.) and what concerns do you have?

Answer 1

Answer:

What forms of business are available to you?

Sole trader.

Partnership.

Limited company.

What are the pros and cons of each option?

Sole trader:

pros:

You Have Full Control

Ownership Over Profit

Setting Up as a Sole Trader is Easy

There’s Less Admin Involved

You Have More Privacy as a Sole Trader

You Can Offer a Personal Touch

You Can Easily Change Your Business Structure Later

cons:

Debt Liability

It Can Be More Difficult to Get Financing

You Make All the Decisions

You May Have Less Free Time

You Have Less Flexibility When it Comes to Tax

Your Business May Not Be as Appealing to Clients

Partnership:

pros:

Easy to get started

Sharing the burden

Access to knowledge, skills, experience and contacts

Better decision-making

Privacy

Easy access to profits

cons:

The business has no independent legal status

Unlimited liability

Limited access to capital

Potential for differences and conflict

Profits must be shared

Limited company:

pros:

You could end up paying less tax

It might be easier to attract investment

You’ll have limited liability protection

cons:

You’ll encounter more financial admin

You’ll face more rigid taxation rules

You’ll have less privacy than a sole trader

Which would you choose and why

I would choose a limited company as I am a new business and if my business fails then I will not need to lose my assets to pay off the business debt.

What challenges do you think you will face

Getting staff, especaily experienced ones.

Also raising brand awareness as I'm a new business and might have to invest a lot of money into promotion.

Also trying to break even within the first couple of months as the business will not be able to survive unless it passes this threshold.